MARKET WATCH: Crude oil prices decline; gas continues rally

Crude oil prices were pulled down Oct. 2 by weakness in the US gasoline market, but natural gas maintained its rally for the sixth consecutive session in the New York market on forecasts for colder weather.

“Gasoline prices have fallen as participants grow concerned that supplies will start to rise as East Coast refineries come back on line after maintenance and repairs,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “Refinery shutdowns, together with the US driving season over the summer months, have seen gasoline inventories reach particularly low levels, which until now has kept gasoline prices aloft and consequently provided support for crude prices,” he added.

In Houston, analysts at Raymond James & Associates Inc. reported the equity market “edged slightly higher” Oct. 2, “even as investors grew increasingly concerned that Spain will soon request a bailout from the European Central Bank.” The SIG Oil Exploration & Production Index gained 0.4%, but the Oil Service Index declined 0.4%.

Ground said, “Weaker Chinese Purchasing Managers Index services data (53.7 in September, compared with 56.3 in August) and strengthening bias in the dollar has extended the move lower in crude oil prices [in early trading Oct. 3]. There was a let up in dollar strength earlier after better-than-expected Euro-zone retail sales figures. However, this was short-lived.” Euro-zone retail sales were up 0.1% month-over-month compared with a consensus for a 0.1% decline.

In other news, Automatic Data Processing Inc. said Oct. 3 US business added 162,000 jobs in September, down from the revised-lower August addition of 189,000 jobs. The September data were better than some economists expected but not enough to reduce the unemployment rate that has exceeded 8% for 3½ years. It takes 100,000 new jobs each month just to match growth of the working-age population, officials said.

US inventories

The Energy Information Administration said Oct. 3 commercial US crude inventories dipped by 500,000 bbl to 364.7 million bbl in the week ended Sept. 28, frustrating Wall Street’s consensus for a gain of 1.5 million bbl. Crude stocks remain above average for this time of year, however. Gasoline inventories inched up 100,000 bbl to 195.9 million bbl against expectations of a 500,000 bbl decline. Finished gasoline stocks increased while blending components decreased. Distillate fuel inventories fell 3.7 million bbl to 124.1 bbl, surpassing an anticipated decline of 400,000 bbl.

Imports of crude into the US increased 511,000 b/d to 8.1 million b/d last week. In the 4 weeks through Sept. 28, US crude imports averaged 8.5 million b/d, down 295,000 b/d from the comparable period in 2011. Gasoline imports last week averaged 573,000 b/d, and distillate fuel imports averaged 58,000 b/d.

The input of crude into US refineries increased 222,000 b/d to 14.8 million b/d last week with units operating at 88.2% of capacity. Gasoline production increased to 9.1 million b/d, while distillate fuel production decreased to 4.6 million b/d.

Energy prices

The November contract for benchmark US light, sweet crudes decreased 59¢ to $91.89/bbl Oct. 2, ending a 3-session rally on the New York Mercantile Exchange. The December contract declined 58¢ to $92.27/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 59¢ to $91.89/bbl.

Heating oil for November delivery continued its retreat, down 1.03¢ to $3.13/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dropped 5.09¢ to $2.87/gal.

The November natural gas contract continued its rally, up 5.1¢ to $3.51/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., advanced 3.5¢ to $3.22/MMbtu.

In London, the November IPE contract for North Sea Brent lost 62¢ to $111.57/bbl. Gas oil for October fell $2.75 to $979.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes rose 3¢ to $109.32/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected